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County tourism agency sues city over bed tax proceeds

NIAGARA FALLS – Niagara County’s tourism promotion agency sued the City of Niagara Falls on Tuesday over the city’s refusal to convey proceeds of the city’s tax on hotel and motel bills to the agency.

The Niagara Tourism and Convention Corp. filed the suit in State Supreme Court, demanding that a judge order to city to pay the NTCC $133,334, which the agency claims is the amount the city owes it for June and July.

On July 8, the City Council voted, 3-2, to table a one-year extension of the city’s contract with the NTCC. Mayor Paul A. Dyster, who said he advocates a long-term contract extension for the NTCC, said the city’s legal staff advised him not to pay the “bed tax” money.

The NTCC contended in its suit that the County Legislature’s one-year extension of its deal with the NTCC, signed June 18, means the city has to pay up. The suit cites a state tax law that says the money “shall be allocated and paid to a not-for-profit corporation under contract with the county for the promotion of tourism in the county.”

The NTCC receives about 94 percent of its revenue from Niagara Falls, which levies a 5 percent tax on hotel and motel bills.